Il Pnrr It was meant to give Italy an "epochal" revival. But with theapproaching the deadline for the use of loans and grants, the Italian economy remains stagnant. From the construction of nursery schools to the modernization of the railways, up to the acceleration of the judicial system, the Italy has not been able to make it work properly the share that was allocated to her 194 billion euros from the EU Recovery and Resilience Fund, denounces the Financial Times.
“Ultimately, we are in a situation where we have higher debt and very little progress has been made on serious reforms,” he told FT the Economist Tito Boeri, co-author of the book on the EU-funded programme, The Big Binge, together with the economist Roberto Perotti, published in Italy in 2023 with the title Pnrr. "I'm not saying all the money was wasted," says Boeri, former president of INPS. "But we haven't improved our growth potential. And given that we already have a high debt, this is a big problem."
Italy is the main beneficiary of the EU NRRP, with a total value of 577 billion euros, established in 2021, an initiative of unprecedented joint loan for relaunch the economies of the Member States after the shock that followed the Covid-19 pandemic.
Billed as “transformative” at the time of its passage under the then Prime Minister Mario Draghi, the Italian spending plan was accompanied by important reforms which would have had to address the persistent weaknesses of the national economy, including an inefficient public administration, a slow judiciary, and the low participation of women and young people in the labor market.
The countless revisions of the Plan
But the Plan, consisting of 72 billion euros in grants and the remaining part in low-interest loans, Was revised six times as Rome has struggled to meet its targets, while inflation triggered by Russia's full-scale invasion of Ukraine in 2022 has pushed up the cost of public works, the newspaper says.
Secondo Stephen Firpo, former public official who contributed to the drafting of the National Recovery and Resilience Plan for the digitalisation of public services, about 70% of the goals have been changed at least once after that Giorgia Meloni, became Prime Minister in 2022. “The plan in force today is completely different from the one presented in 2021,” said Firpo, now general manager of Assonymous, the association of Italian businesses. "In many of these projects, when asked what these funds were invested in, the answer is rather vague."
Secondo Marco Leonardi, one of Draghi's main advisors on economic policy when he was prime minister, Brussels it has proven itself surprisingly forgiving in approving the new government's repeated requests for changes. "The European Commission has been lenient in many respects," said Leonardi, now an economics professor at the University of Milan. "It hasn't been very strict in its controls. I would have expected much stricter behavior. Instead, the Commission let us do what we wanted."
I Commission officials They reject criticism that the Italian plan was significantly scaled back to meet its objectives and allow for the disbursement of funds by the end of the year, a condition imposed by countries opposed to contracting further EU debt for the program's approval. "Rewriting the plan does not necessarily mean reducing ambition, but rather changing strategy," he told Financial Times an EU official: “If I rewrite the plan, it's not that I'm doing less. I'm doing something else.”
Italy has secured nine of the ten planned tranches, for a total of 166 billion euros, a result that Thomas Foti, Minister for European Affairs, recently cited as evidence that Rome has “overcome the structural weaknesses that have held Italy back for decades.” But at the end of the 2025, According to Eurostat, Italy had spent only 57% of the allocated funds.
"The government is not transparent "It's not about how we spent the money, nor how much is left," Leonardi said. "They don't want to give back all the billions they left on the table for political reasons." Without the EU funds, many economists agree that Italy likely would have entered recession last year.
The Italian train is still late
The macroeconomic trend remains disappointing to say the least, says the Financial Times. Italy is late compared to much of the rest of Europe, including other Mediterranean countries such as Spain and Greece. The Italian GDP grew by 0,5% in 2025, one of the lowest rates in Europe, and is expected to remain largely unchanged this year and next. Meanwhile, the ratio debt/GDP It rose from just under 134% in 2023 to over 137% at the end of 2025, and is expected to reach 138,5% this year, when Italy overtakes Greece as the EU's most indebted economy.
Boeri, professor of economics at Bocconi University in Milan, believes that the PNRR was “overly optimistic” and “completely unrealistic” from the beginning, given the Italy's poor performance in the use of European fundsAlthough the reforms were "absolutely necessary," they were "ill-conceived," failing to account for the inevitable resistance and tight deadlines. "Even the most efficient administration would have found them difficult to implement," he reports. ft extension According to critics, the original plan was too fragmented, With small investments distributed among a myriad of participants. Some of these were of dubious utility: a solar-powered shelter for stray animals, a racetrack, or the football stadiums in Florence and Venice, which were later rejected by Brussels.
The Meloni government is "streamlining" its objectives to make them easier to achieve.
After taking office, the Meloni government spent nearly a year reviewing projects in an attempt to eliminate "unnecessary" expenditure. Further changes followed, with the “simplification” of objectives to make them easier to be achieved, but at the same time changing the true meaning of the process. For example, a labor market program The €4,4 billion initiative aimed to stimulate employment by helping 800.000 unemployed, furloughed workers, and other vulnerable workers retrain for jobs in the renewable energy or digital sectors. Initially, beneficiaries were required to complete a training course, finding a job or otherwise demonstrating an improvement in one's employability. However, the definition was later simplified, simply requiring the proof of “registration” to a training program. EU officials defended the changes, saying that disbursements had become bogged down in "word-for-word" evaluations, causing blockages for "formalistic reasons."
Extra time: Part of the National Recovery and Resilience Plan (NRRP) postponed beyond 2026
In a sixth revision, which took place last year, Rome and Brussels reached a agreement to allow Italy to use part of the funds beyond 2026 in the hope of having a greater return from the PNRR. The funds are to be used for investments in the construction of student accommodation, the supply of high-speed internet to remote areas, the development of solar parks and support for thefemale entrepreneurshipThe temporary solution requires Italy to allocate at least €7 billion in special project-related funds to prevent funding from running out by the end of the year. The Finance Ministry said the solution was necessary to bridge a "mismatch" between the ambitious plans and the short implementation timeline.
